Apartment rents across the country reached another all-time high last month, according to a survey that tracks 35 Canadian markets.

Rentals.ca said the average asking rent reached $2,178 per month in December, an 8.6% increase from a year ago and just the latest new high in the market.

"The rate of rent growth in Canada was stronger than expected in 2023, mainly due to a surge in non-permanent residents, a resilient economy, and a sharp pullback in home buying activity," said Shaun Hildebrand, president of Urbanation, in a commentary. "While rents are expected to continue rising in 2024, there should be less upward pressure on the market this year as demand increases at a somewhat slower speed and more supply is added."

A TD Cowen report issued Tuesday said the company held a conference with 34 management team representatives from both public real estate investment trusts and real estate operating companies and select private companies and found the outlook for residential was among the top among all real estate asset classes.

"The outlook was especially positive for the Canadian residential and retail sectors where management continues to see very strong leasing fundamentals," according to the report authored by Sam Damiani, Jonathan Kelcher and Jaz Cumberbatch.

Rentals.ca, which produced the rental rate report with Urbanation, noted asking rents are up 22% over the past two years. Vancouver and Toronto are still the most expensive cities, with average monthly asking rents of $3,059 and $2,832, respectively, but rents in Calgary are rising at a faster rate than other cities.

While Toronto and Vancouver are seeing slowdowns in rental growth, Calgary posted the fastest annual rent growth for apartments in December, with rents rising 14% from a year ago to an average of $2,071. Edmonton was next at 13.5%.

The report said 2024 will continue to see an under-supplied rental market although somewhat more balanced. Nationally, the average apartment rent growth is projected to move to approximately 5%.

"Anticipated factors influencing the rental market in 2024 include a slowing economy, a reduction in the number of non-permanent residents, and an improvement in homebuying activity fueled by declining interest rates," according to the report. "The introduction of more apartment completions and an anticipated increase in tenant turnover are expected to inject additional supply into the market, mitigating rent growth compared to 2023."

A Statistics Canada report issued Tuesday said the rising rental market contributed to a 3.4% increase in the consumer price index in December from a year ago.

StatsCan said rent prices rose 7.7% in December year over year, following a 7.4% increase in November.

"Among other factors, a higher interest rate environment, which can create barriers to homeownership, put upward pressure on the index. While rent prices remained elevated on a year-over-year basis in most provinces in December, prices in Ontario (+6.9%), British Columbia (+8.6%) and Quebec (+6.8%) contributed the most to the increase," said the federal agency.